1578.HK
Bank of Tianjin Co Ltd
Price:  
2.58 
HKD
Volume:  
978,500.00
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1578.HK WACC - Weighted Average Cost of Capital

The WACC of Bank of Tianjin Co Ltd (1578.HK) is 5.2%.

The Cost of Equity of Bank of Tianjin Co Ltd (1578.HK) is 14.45%.
The Cost of Debt of Bank of Tianjin Co Ltd (1578.HK) is 5.00%.

Range Selected
Cost of equity 10.40% - 18.50% 14.45%
Tax rate 6.50% - 7.50% 7.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.0% - 5.4% 5.2%
WACC

1578.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.25 2.1
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.40% 18.50%
Tax rate 6.50% 7.50%
Debt/Equity ratio 17.2 17.2
Cost of debt 5.00% 5.00%
After-tax WACC 5.0% 5.4%
Selected WACC 5.2%

1578.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1578.HK:

cost_of_equity (14.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.